Purchasing a Rental Property with existing Management/Lease in place
We just purchased two rental properties with long-term tenants in them. We waiting to close until the end of the month when their current leases expired so we can put different property management in place. Now, we have the old property management's lawyer sending us a notice saying they are claiming they have the legal right to manage the properties. I was under the impression the seller notified their management company of the sale of the properties. I have not signed any agreement with the old management company and both tenants already signed new leases with our chosen new property management company. Does the old management company really have a claim?
The agreement they had with the previous owner has nothing to do with you, once it’s sold, they no longer manage.
One weird item I saw last year was a listing that stated that the pm would transfer with the tenants upon the sale of the property 😳😳
If this was not disclosed, they need to move on…..
Quote from @Jera Brandenburg:
I agree with Kim. The Seller had a contract with the Property Manager. I don't believe the PM can force you to abide by that agreement.
I would contact the Seller and tell him to work this out with the PM. If the PM has an attorney, then there's a pretty good chance they have a termination clause and the seller should adhere to it.
I definitely agree with Kim and Nathan! The management agreement would have been signed with the previous owner, the seller. This would typically not carry over to the buyer once the property sold. This needs to be situated between the seller and the property management firm.